Interim trade policy fails to enthuse industry

New Delhi, Feb 26 (IANS) The interim trade policy announced by Commerce and Industry Minister Kamal Nath Thursday evoked mixes response from India Inc, which found the measures to ease procedural hurdles as “necessary”, but said the export target was “really challenging”. “The best part of the announcement is that the government has eased certain procedural hurdles. The figures on exports are very much encouraging as they will boost the sentiment. However, it is up to the exporters whether they are able to achieve the target,” said Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI).

In the trade policy, Kamal Nath announced the reduction of customs duty under the export promotion capital goods scheme (EPCG) scheme from 5 percent to 3 percent, and extended the benefits under Duty Entitlement Pass Book (DEPB) scheme.

The minister hoped the country would log merchandise exports of at least $175 billion during the current fiscal.

FICCI president Harsh Pati Singhania said facilitation measures were “indeed necessary for simplifying procedures and reducing transaction costs. They will be critical in giving the exporting community some comforts in the backdrop of current slowdown”.

“Now the real challenge for Indian business is to achieve the export target of $200 billion in 2009-10,” Singhania said.

Sajjan Jindal, president of the Associated Chambers of Commerce and Industry (Assocham) welcomed customs duty reduction, but added that the finance ministry should immediately ratify it with necessary notification.

“Extension of the DEPB for exporters is also a welcome measure that exporters will cherish,” Jindal said.

He, however, added that the special package of Rs.325 crore for leather and textiles was far below the expectations of India Inc.

According to A. Sakthivel, president of the Federation of Indian Export organisation (FIEO), the measures are “pragmatic”.

However, apparel export sector was deeply disappointed with the trade policy.

“The textile and apparel sector has been ignored,” said Rakesh Vaid, chairman of the Apparel Export Promotion Council (AEPC).

“No impetus has been provided in the two economic stimulus packages or the interim foreign trade policy,” he added.

The procedural simplifications will have only marginal impact, as there is no move to enhance new production capacity, Vaid said.

Apparel exports from India are likely to stagnate this fiscal, he added.

However, Foreign Trade Director General R.S. Gujral said the measures will “certainly” have positive impact on the export sector.

“These are procedural measures taken by the government and it is not easy to quantify it in terms of revenue loss. However, it will certainly help the procedural delays,” Gujral said.